The present invention relates to computer systems, and more particularly, but not exclusively, relates to systems for aiding property assessment.
Assessors are given the monumental task of assessing commercial (and other) real estate in their area, yet are not typically formally trained as real estate appraisers. Currently commercial real estate is assessed by the cost method (cost new−depreciation=assessed value). The income approach consists of these basic components: Gross Income (such as rents) less Vacancy and Expenses=Net Operating Income; then N.O.I. divided by an overall capitalization rate=value. The income approach to valuing commercial property has been used by appraisers and brokers & developers for decades, but not assessors, due to its complexity.
Assessors do not typically understand capitalization rates. They often do not know what the market rent is for the area. Both of these are required details that are necessary for using an income approach. Assessors do not have the time or training to do extensive market data research beyond what is on the property record card, and thus do not use the income approach automated valuation systems that are currently on the market for appraisers. A need exists for further advancements in this area.
Another problem that assessors face is dealing with obsolescence. In simplest terms, obsolescence means “things that can reduce property value compared to other properties”, such as an apartment with no air conditioning. Currently, assessors either arbitrarily put on an obsolescence factor because of pressure from property owners to lower taxes, or more often, they use vacancy as the obsolescence factor. For example: a property that happens to be 40% vacant might get a 40% abnormal obsolescence factor (whether or not the vacancy was really due to obsolescence versus poor management, etc). A need exists for improved systems and methods that ensure assessors only apply obsolescence where it actually exists and so assessors can identify when the discrepancy in value is due to some reason other than obsolescence.
The present invention is directed to meeting this and other needs.